Agent’s Negligence: Breach of Real Estate and Business Brokers Act, 2002
Another source of laws involving real estate Agents is the Real Estate and Business Brokers Act, 2002.
Some of its provisions offer an important grounding for negligence claims.
Disclosure of Interest
Here is the relevant section of the Act:
Acquisition or divestiture by registrant
32. (1) Unless the registrant first delivers to all other parties to the agreement the notice described in subsection (2) and the other parties have acknowledged in writing receipt of the notice, no registrant shall, directly or indirectly,
(a) purchase, lease, exchange or otherwise acquire for himself, herself, or itself, any interest in real estate, or make an offer to do so; or
(b) divest himself, herself, or itself of any interest in real estate, or make an offer to do so.
The above section is particularly important and can give rise to liability and the failure to be able to complete the transaction. It’s negligence when others parties participate with the Agent since it contaminates their entire side.
Here are some other provisions of the Act which may support a claim in negligence as against the Agent:
Prohibition re: breaking contract
33. (1) No registrant shall induce any party to an agreement for purchase and sale or an agreement for rental of real estate to break the agreement for the purpose of entering into another such agreement.
Date of signing
(2) Every salesperson and broker shall make all reasonable efforts to ensure that a person signing an agreement in respect of a trade in real estate sets out the date upon which the signature was affixed.
(3) Unless agreed to in writing by the seller, no brokerage is entitled to claim commission or other remuneration from the seller in respect of a trade in real estate if the real estate is, to the knowledge of the brokerage, covered by an unexpired listing agreement with another brokerage.
34. No registrant shall falsify, assist in falsifying or induce or counsel another person to falsify or assist in falsifying any information or document relating to a trade in real estate.
Furnishing false information
35. No registrant shall furnish, assist in furnishing or induce or counsel another person to furnish or assist in furnishing any false or deceptive information or documents relating to a trade in real estate.
Offers to purchase real estate
35.1 (1) No registrant shall,
(a) while acting on behalf of a purchaser, present an offer to purchase real estate except if the offer is in writing;
(b) represent to any person that a written offer to purchase real estate exists except if the offer is in writing.
Commission and remuneration
36. (1) All commission or other remuneration payable to a brokerage in respect of a trade in real estate shall be an agreed amount or percentage of the sale price or rental price, as the case may be, or a combination of both.
If no agreement
(1.1) If there is no agreement as to the amount of the commission or other remuneration, the rate of it or other basis for determining it shall be that generally prevailing in the community where the real estate is located.
(2) If the commission payable in respect of a trade in real estate is expressed as a percentage of the sale price or rental price, the percentage does not have to be fixed but may be expressed as a series of percentages that decrease at specified amounts as the sale price or rental price increases.
(3) No registrant shall request or enter into an arrangement for the payment of a commission or any other remuneration based on the difference between the price at which real estate is listed for sale or rental and the actual sale price or rental price, as the case may be, of the real estate, nor is a registrant entitled to retain any commission or other remuneration computed upon any such basis.
37. No registrant shall make false, misleading or deceptive statements in any advertisement, circular, pamphlet or material published by any means relating to trading in real estate.
The above sections are reasonably self-explanatory.
Brian Madigan LL.B., Broker